Labour Productivity and Employment in Surplus Labour Countries

Abstract

Chapter 3 argues that the ILO’s decent work agenda is insensitive to the needs of countries with high unemployment. We identify thirteen developing countries whose unemployment rate in 2016 was over twice the mean for low- and middle-income countries. Most are war-torn, post-communist, and unfree. However, for a set of Southern African countries, high unemployment is the consequence of domestic policy within a regional context of relatively limited opportunities for smallholder agriculture and dominated by the strength of the South African economy. Contemporary development policy advice, especially from the ILO, prioritizes labour productivity growth without confronting the need to foster relatively low-productivity employment to provide jobs for large numbers of relatively unskilled people in these countries. Rising labour productivity in the surplus labour countries during the 2000s came at the cost of stagnant, and even falling, employment rates. Given inadequate welfare support for the unemployed, such growth paths undermined inclusive development in these countries.